Homestore to restate financials

BambiFrancisco

SAN FRANCISCO (CBS.MW) -- It was too good to be true.

Homestore.com admitted that it overstated its online advertising sales in the first three quarters of 2001 by between $54 million and $95 million, or as much as 26 percent of the $364 million in sales generated in that period.

The advertising revenue in question should have been accounted for "as barter transactions because they were related to purchases by the company of goods and services from third parties," according to a release.

Shares of Homestore.com
HOMS
have been halted since Dec. 21, the Friday before the holidays, when the online real-estate services company announced that it was conducting an internal audit of its books. See Net Stocks: Homestore was home alone.

The inquiry is not complete, however. There may be additional material restatements, the company warned. The company, which provides online real estate and home-improvement information, is still looking into transactions from 2000.

The company hopes to complete its investigation by the end of this quarter.

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